Nightmare on Princes Street
Four out of five self catering properties to close in Edinburgh according to council's own projections
Visitors to Edinburgh face a scramble for somewhere to stay as shocking new official figures show more than 4,500 properties are expected to close in a government crackdown on small tourism businesses.
Edinburgh council has revealed that it expects four out of five self catering properties in the city will be forced out of business by the Scottish Government’s new short term lets legislation.
The new law comes into force on October 1 and requires all bed and breakfasts, self catering properties and guesthouses to be licensed to operate by their local councils.
With just six weeks to go fewer than 20% are understood to have applied and now Edinburgh council has confirmed what many in the industry have been warning - that the new law will force thousands of small businesses to close forever.
In a policy document prepared for a discussion on the planned tourism tax, officers warned:
“There will be an impact from the new licencing and regulations decision locally to be applied from September 2023. To account for all of these together, an assumption of an 80% reduction from the Edinburgh 2021 number of active listings reported on Airbnb, as a proxy for the size of short terms lets.”
In July 2021 there were reported to be 5,803 Airbnb listings for Edinburgh and although not all properties use the letting platform, that reduction would mean the council expects 4,642 properties to close as a result of the new law.
Were the same proportion of closures to occur across the rest of the country, the figure would reach into the tens of thousands.
According to the Scottish Government’s own assessment, there were 32,000 active listings on Airbnb in May 2019. A drop of 80% would mean as many as 25,600 closures.
Businesses have been reluctant to apply for licences, with industry leaders describing the process as unduly bureaucratic and costly. The Association of Scotland’s Self Caterers has warned that large numbers are considering quitting the industry.
In Edinburgh owners face a further hurdle because they now require retrospective planning permission for businesses that are currently trading and the council has made clear that many are likely to be refused.
Tourist tax
In further bad news for Edinburgh’s beleaguered small tourism businesses the policy document also raised the prospect of adding a tourist tax of up to 7% to visitors’ bills.
With an average nightly stay in an Airbnb costing about £150, according to analysis website AirDNA, that would mean an extra £10.50 a night on bills.
The council estimates that it might raise £37 million from taxing visitors to the city at the 7% rate.